Boston (Dec. 11, 2003) -- Financial services market research firm Dalbar Inc. has come out swinging against the proposal to enforce the 4:00 p.m. cutoff for mutual fund trade orders.
In a position paper, “The Four O’clock Shuffle,” the company railed against a rule proposed last week by the Securities and Exchange Commission aimed at ending late trading. The rule would require that orders to purchase or redeem fund shares be received by the fund, its primary transfer agent or a registered securities clearing agency by the time that the fund establishes for calculating its net asset value in order to receive that day's price -- 4:00 p.m. for most funds. Advocates of enforcing the cutoff say it will remove the opportunity for insiders to insert transactions after the close of business that take advantage of market-moving news that occurs after 4:00.
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